Messing with Bank will hurt poor people
ANC proposal for nationalisation is not the answer as it plays a critical role in supporting economic growth
The Reserve Bank has apparently become a political hot potato overnight. In reality, however, the independence and mandate of the Bank, while suddenly the topic du jour, has for many years been contested among those in the governing alliance. On the final day of this week’s ANC policy conference, a proposal was tabled to nationalise the Bank, which is in any event already accountable to government. Naturally, this spooked markets and weakened the rand. But nationalising the Bank by buying out its 600-odd private shareholders will do nothing to the way it operates in practice. Its mandate is enshrined in the Constitution and is something over which the shareholders have no control in any event. Still, investors and businesses would perceive the move, if it ever materialises, as the beginning of an assault on the Reserve Bank’s independence. And, in turn, attacks on monetary policy, which has proved highly successful up to now. The Bank’s independence and function were thrust into the...
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